While official ambitions are to refashion the global financial architecture, the IMF has yet to publish new thinking on capital flows, the G20 discussion on global imbalances is mired in dispute and the debate on a new monetary system may go in the wrong direction.
As emerging market economies expand tools to actively manage international financial flows to cope surges, a liberalisation reform of the IMF's statutes is up for debate again.
In January, French president Nicholas Sarkozy stoked the debate about reforming the international monetary system while deliberations on the potential future role of the IMF’s special drawing right as a prototype global reserve currency continued.
Debate about 'currency wars' and capital controls has dominated global economic policy making this autumn, but serious talks to reform a crisis-prone and outdated international monetary and financial system remain elusive.
World Bank/IMF Programme of Seminars debate on managing capital flows
The World Bank’s latest report on foreign investment and its new trade strategy are part of a worrisome trend that involves the Bank’s growing use of tools other than conditionality, to restrict the space for countries to pursue alternative, country-tailored development strategies.
As the IMF mandate reform concludes, significant changes prove elusive.
This briefing explores the impact of capital account policy on international development. The liberalisation of capital accounts in developing countries has been promoted by international economic and financial institutions. However, with evidence showing the damaging economic, social and human consequences of unrestricted capital movement, tools to manage capital flows are increasingly being embraced by policy makers and academics.
While the intellectual thinking within some parts of the international financial institutions has recognised the usefulness of capital controls, there is yet to be formal acceptance of them within the International Monetary Fund (IMF). While the IMF's Articles of Agreement already contain important provisions about the rights of countries to use capital controls, consensus has not been achieved among the Fund's largest members on capital account management, despite its importance for both large
A leaked copy of the IMF's report to the G20 on A fair and substantial contribution by the financial sector which proposes two new financial sector taxes to cover some of the costs of the financial and economic crisis, has been criticised by campaigners for inadequate analysis of the potential of the financial transactions tax (FTT), dubbed the Robin Hood tax.